What would Nimrod Bar-Levin accomplish in several years of building OnO Apps, a mobile app developer shop, back in 2009? In short, a lot. His road to acquisition would prove to be fast and smooth, coming in and out of the app industry on the upside and gaining invaluable experience along the journey. “I hate risk more than the average entrepreneur,” or so Nim says, but his first decision to enter a premature and unpredictable market would contradict this self assessment. It was his first startup, and he had no real reason to enter the mobile app business, other than a feeling that it was time to execute the pact with Orr Kowarsky, his co-founder, and best friend since high school, that they would start a company together, and 2009 seemed like as good a time as any.
They were keen to focus on an industry where they could work together, and the app market felt like a great basis for them to start. At this point, it had only been a year since Apple enabled third-party developers to program native iOS apps and contribute to the App Store.125 “It was fresh and new. We felt like pioneers even discussing it,” said Nim.
It was clear from the get-go that they wanted to become a service house for mobile development, however, they never imagined themselves scaling very much. With humble dreams and present minds, they learned the ways of building quality iOS apps. They quickly understood that they needed more than just their programming skills, so they hired their first designer.
OnO was one of the first development shops in Israel to build mobile apps. Nim and Orr were determined to keep the business model airtight, focusing solely on iOS and Android apps, and nothing else. Other developer shops were popping up all over Israel, but they focused on websites, platforms, and even Facebook pages (a fleeting trend in 2009). The simple decision to keep their business a niche venture would serve as the foundation to their success and ultimate merger with Matrix.126
The first few months of OnO were difficult. The team needed to find clients and generate revenue, but they had no projects or experience to help with such efforts. Nim and Orr needed to build street credibility. They decided to create two simple apps of their own so that OnO could be featured in the App Store and start building its portfolio to attract customers. The first app was called FLY TLV and all it did was show arrival and departure times for flights in Israel’s airport, Ben Gurion International Airport. The second app called Pray to J had only one functionality: to show users (Jewish people in Israel) which direction Jerusalem was in order to pray. Both apps made way for Nim to approach potential clients. However, it wasn’t enough to really grow the business.
That’s when Nim and Orr did the kindest and ultimately the most rewarding act they could have done. They approached different NGOs in Israel, and told them that OnO would do one ‘pro-bOnO’ app every six months. At this point, OnO was only a few months old, but the team knew if they could build an app that people would use, and help the community in Israel at the same time, it would be well worth their while. The first NGO to accept was ADI,127 an organization leading recruitment for organ donations. OnO built an app to help them source organ ‘dOnOrs’ and it was a huge success. Aside from the app's popularity and large user base, OnO was also published all over Israeli newspapers for months. They did a couple of other apps either for themselves, or for NGOs, all of which helped establish credibility and turn them into the company that built the most apps in Israel.
From that point on, their laser focus on the app market paid off. They had invested a total of $10 thousand dollars into the first five apps they built, and they were able to draw in a lot more revenue. The projects started to pile up, and it was time for OnO to grow its team.
They started as a team of four sitting in a small factory turned office in Ganei Am, a small village in Israel. It was a big open space with desks and computers scattered about. After several months and a few projects later, they built one closed off room for Nim and Orr to interview potential hires and discuss more sensitive topics. The office represented OnO’s DNA, and Nim used it as a hiring filter. “Interviewees entered the space, and we immediately saw on their face whether they appreciated it or not. It was pretty binary, either a big yes or a big no. Most of our employees were friends who brought friends, and this was of the highest importance to us,” said Nim. The founders, like the employees they hired, were simple and liked to run a simple organization. Nim called himself the “minister” of foreign affairs, while Orr was the internal affairs one. Outside of this, everyone just worked on the projects and didn’t get caught up much on titles. According to Nim, this simplicity appealed to specific personas, and the office culture worked really well.
The main problem back in 2010 was that most people in Israel had zero experience developing apps, especially not as a day job. Nim recalls working around the clock developing apps because it was so difficult to recruit talent. Nim and Orr quickly understood they needed to offer people out of university and looking for work the opportunity to learn how to program. And that’s just what they did. They taught programming to anyone and everyone who stumbled into their office and showed eagerness to work at OnO, motivation for the mobile arena, and above all – a smiling vibe. By doing so, they were able to train their first 15 employees on the method and quality of work. The logic was: if you can’t find them, teach them.
It was never Nim and Orr's plan to be acquired, the path just organically led there. In their eyes, they were a small development shop creating a nice amount of revenue but nothing more. “I think we were progressing very measurably, and we had more and more projects and more and more customers, but we never jumped too high or higher than where we thought we could fall from,” said Nim.
In 2011, OnO changed its company slogan to “Mobile Variety at Its Best.” By this time, the mobile app industry was bustling, and developer shops in Israel were focusing on specific sectors. While Nim always wanted to stay focused on mobile apps, he wasn’t concerned about which industries to dedicate resources to. This proved to be a big advantage for them, as they acquired many more customers. By 2013, OnO expanded beyond Israel and began to take on international projects. Their customers were located anywhere from the U.S. to Europe, and some even in India and Australia. “We got significantly bigger and very dominating in 2013,” said Nim. “People started approaching us to acquire us, but we didn't want to be acquired for the amount they offered.” OnO got five acquisition offers from different companies at this time, one of which was from Israeli gaming giant, Playtika.128
By 2014, OnO was a 30-person team, split into a few different internal departments. Their office became too small and their expenses grew too quickly – hence the risks were bigger. Nim and Orr began to consider acquisition offers more seriously. By 2015, they had a few options on the table, and finally settled on an offer of a few million dollars from Matrix, a leading IT company in Israel. While they did accept the highest relative offer, it wasn’t significantly higher than the other options. The prime reason Nim and Orr gravitated most to Matrix was for the chance to manage a triple- digit team size under the Matrix umbrella. “It was the fastest way to bring us to 100 people, and Matrix was offering that. The risk was not so high to take and there was little chance to be shut down in a few years,” said Nim. Another major reason they went with Matrix was due to the synergy. For both Nim and Orr, and the Matrix M&A team, it seemed clear -- Matrix would be able to bring gigantic customers, while OnO would bring Matrix younger, startup customers. Nim was eager to bring in big names with ongoing projects from the financial sector, from banking to credit card companies, and the merger with Matrix would facilitate that leap.
The acquisition merged the entire OnO team with Matrix’s mobile team. OnO left the office in Ganei Am, and moved to a WeWork in Herzliya – across from the Matrix Headquarters. The merger brought with it a culture shock for both sides. Their differences were quite fundamental, where OnO operated more like a family and gave itself more time with each app, Matrix was used to turning around more projects and taking on much heavier workloads. Where OnO employees were used to running two projects simultaneously, Matrix employees juggled between six to seven projects at a given time. In Nim’s eyes, they took on too much and over promised. “You cannot have so many context switches a day. It affects the quality of approaching us to acquire us, but we didn't want to be acquired for the amount they offered.” OnO got five acquisition offers from different companies at this time, one of which was from Israeli gaming giant, Playtika.128
By 2014, OnO was a 30-person team, split into a few different internal departments. Their office became too small and their expenses grew too quickly – hence the risks were bigger. Nim and Orr began to consider acquisition offers more seriously. By 2015, they had a few options on the table, and finally your products significantly,” said Nim. The OnO team was shocked by all of the project requests, and it quickly turned into a high-stress environment. Nim understood that Matrix, being a public company with 8,000 employees, was not playing games. They were in the business of both technology and making money. With that said, Nim understood the mobile business well and in his view, quality apps trumped quantity of execution every time.
Nim made efforts to reach an understanding with Matrix’s higher management to find a better balance. “In the mobile world where Steve Jobs of Apple and Larry and Sergey from Google set the tone, you cannot publish an app that is less than okay,” said Nim. While it was a difficult concept for the Matrix managers to wrap their heads around, Nim and Orr eventually convinced them to be more selective of app projects, and have the teams manage lighter workloads. The DNA clash between Matrix and OnO had a heavy impact on the employees and on OnO’s culture, and it took time for Nim and Orr to create the common ground needed for OnO to continue growing steadily. “If and when I have another merger, I will spend more time and effort in understanding the DNA of the acquirer, and the differences. Then, a decision would be made about what to do with these differences. This is one thing that we didn't do well enough, and it hurt our employees,” said Nim.
In return, Nim suggested raising the prices for each app they produced. Matrix managers were skeptical at first, weary that companies wouldn’t pay such expensive prices to develop an app. However, the payoff between their reputation as app developers and their higher prices was worth it, even if it meant they would lose occasional projects along the way.
From that point on, OnO won many large app projects from clients like Bank Hapoalim, Bank Leumi,129 Visa-Cal, and other financial giants. A pattern was forming: they would do one major company’s app so well that their customer’s competitor would come running to OnO to do its app as well. Nim and Orr took advantage of this. Eventually almost all of the banks, credit card companies, and cellular providers worked with OnO to build their apps .
It was 2017, and Nim was on the top of the OnO mountain. From this vantage point, he began to see how comfortable he had become. OnO was one of the leaders of the app development market in Israel, and Nim had little interest in taking on other Matrix departments just for the sake of it. At this point, they were managing about 80 employees, and he understood that there were not enough companies in Israel to responsibly scale OnO much more. Nim and Orr’s dream to manage hundreds of employees would not become a reality if they stayed in OnO and focused solely on mobile app development. In order to itch for growth became too strong, and OnO had become too much of a comfort zone. By summer of 2017, Nim and Orr spoke with Matrix and began planning their transition out.
Nim admits that walking away was hard emotionally, especially because of the OnO team members. However, they did it over a period of six months and were very organized, so the departure was smooth. They promoted two people from within OnO, and brought in a past manager from Matrix. OnO is still alive and kicking today. In 2018, Nim and Orr launched a new startup in the EdTech space called Dynamo, and are working towards gamifying learning for children and adults. As serial entrepreneurs, they walked away from OnO in January, and by June, they jumped right back in.